Posted on Thursday 23 January 2014 by Ulster Business
By Amanda Ferguson
Increasingly individuals and companies from across Northern Ireland are using the US website to help fund everything from films, music, art and theatre projects to games, design and photography.
The concept is simple – present your idea online, fix a target amount and a deadline.
If people like the project and you secure the backing of enough investors to reach your chosen cash target you get the money. If you don't reach your target, you get nothing.
Those who have used the website successfully say the all-or-nothing funding approach is effective in creating momentum and rallying people around the idea.
Since Kickstarter launched in 2009, 5.4 million people have funded 53,000 creative projects, representing 44% of the total projects pitched to would-be investors.
Initially dismissed as no more than a way to fund projects that could not be made into a business, more and more local companies are finding Kickstarter a viable option when it comes to getting the seed capital they need to get their ideas off the ground.
Rewards for investors range from the finished manufactured product or a credit on a CD, to limited edition artwork, a part as an extra or a t-shirt.
It's anticipated that crowd funding will be the initial financing mechanism of choice for most start-up companies within five years, and it is looked upon as a serious option for entrepreneurs and investors.
It is important to note that Kickstarter is donation crowd funding not equity crowd funding, where people invest in return for shares and a return when the business is able to pay dividends, is sold or launches an IPO. But it still attracts serious amounts of money.
Sebastian Heinz raised £67,000 for his synth boxes, called Patchblocks, using Kickstarter.
The German entrepreneur, who has been living in south Belfast for the last five years, said he decided to use the donation funding website to gauge the response to the product and because it "fits the technology you find on Kickstarter".
He said: "I asked for £10,000 and got it within 24 hours. Within three days there was twice as much and I ended up with £67,000.
"I didn't like the concept of donating for tech; people wanted the product, so they pledged for it. It was purely focused on the product.
"It makes sense for tech companies like mine if you offer the product as a reward. It makes sense for others to use special gimmicks and t-shirts for other products.
"It's very straightforward. You want to make it happen, you get it once it's ready.
You can't buy Patchblocks at this point, but we are going to get them manufactured and they will be available in February through the website."
Inspired by Sebastian and other businesses in the Cathedral Quarter of Belfast, Tim Potter, the co-founder of Little Thunder Co, located in Hill Street, tried to raise £10,000 to finish a children's book called Chalky and the new sports car (pictured above).
Tim said: "We had a vision when we formed the company in March to create a picture book.
"We had been talking about doing something we do as designers in the medium of print. Something people could hold, read and touch, that is tactile.
"A couple of other companies in the Cathedral Quarter have done the same things – Brewbot, See Sense, Patchblocks – and with the funding and grants process taking an extremely long time we decided on Kickstarter.
"It is the perfect platform. We get the funds, keep ownership of the project and speed up the process."
Brewbot – which lets anyone brew high quality craft beers using a kit linked to their smartphone – hit the headlines when the team behind it raised over £114,000 to pass their £100,000 goal.
See Sense too has won awards for its innovative bike light, which responds to the road and flashes brighter and faster to improve visibility. They smashed their target of £12,000, raising almost £34,000 towards the product.
At time of writing the Little Thunder Co team had also secured the £10,000 it required for the development of the book, in fact exceeding £13,000.
Investors have pledged for paperback and hardback versions of the book, digital copies, prints for framing, workshops for companies to equip themselves with the skills to try their hand at picture books and exclusive initial sketches. "If it takes off they could become collectors items," Tim added.
"We want to retain ownership of all this and hope to become a publishing house.We would love Chalky to be a series of books and work with other authors in the future and put Belfast on the map.
"Oliver Jeffers (US-based illustrator and author from north Belfast) shot to fame with his books, so we would like to pick up the torch.
"If people are considering Kickstarter they should remember it is a campaign. It is a 24/7 thing, so you will be working round the clock to try and raise awareness. So far the feedback has been great. We've had local interest on Facebook and Twitter and are starting to get American and other international interest."
Meanwhile, Kyle Graham (23), a musician from Moneyreagh, who works for Crown Jesus Ministries in east Belfast, used Kickstarter to fund a six track EP called Stay Young.
He received £2,030 from 36 backers. This was used for the recording and physical copies and £2,000 of his own money went toward paying for travel to the US, where it was recorded, accommodation and food.
Kyle said: "A buddy of mine, the guy who produced the record, used Kickstarter a year or so ago, and when I saw it on social media I thought it was a good idea.
"I put up a video of a demo track of me outlining how I've got to where I am in my life and my music, and my idea of making a record of my own.
"I asked for £2,000 and got £2,030, so I just about made it. I was so appreciative to everyone who got me over the line."
Stay Young will be released in February on iTunes. Kyle said the only downside to his Kickstarter experience was having to justify music as an artistic form to some people.
"But most people were super positive about it and I would absolutely encourage others to give it a go," he added.
"If it's your own niche thing and you don't see loads of other people doing it people will support it. People like supporting fresh ideas."
For more about Kickstarter visit http://www.kickstarter.com
Kickstarter is the world's largest crowdfunding platform. The company's stated mission is to help bring creative projects to life. Founded in 2009 by Yancey Strickler, Charles Adler and Perry Chen, Kickstarter describes itself as a home for everything from films, games, and music to art, design, and technology. Since its launch on April 28, 2009, over $930m has been pledged by more than 5.4 million people, funding more than 54,000 creative projects.